People are talking about the nation approaching the "fiscal cliff" and wondering what Congress will do to prevent the package of automatic budget cuts and tax hikes when terms of the Budget Control Act of 2011 kick in at the end of the year.

"I'm a little surprised with the reaction of the market since the election," said Stovall, referring to the sharp decline in U.S. stock markets, including a 277-point drop in Dow Jones Industrial Average last week. "Investors are saying `oh no' to the status quo. I think they are worried about the fiscal cliff, and they are taking matters into their own hands by selling stock now."

If Republicans and Democrats fail to compromise on taxes and budget cuts and nothing is resolved by the end of the year, the capital gains rate could more than double and the dividend tax could nearly triple, he said.

Economists have said that inaction could send the nation back into a recession.

But Stovall, who authored a book called "The Seven Rules of Wall Street," said he expects the lame duck Congress to take a delaying action, allowing the new Congress to reach a compromise.

Citing that the Standard & Poor's 500 index, gross domestic product and corporate earnings growth all fared well on the occasions since 1900 that a Democrat was in the White House, Stovall said earnings will grow between 4.5 and 15.5 percent in the five quarters following an "earnings trough" which started in the second quarter and extended into the third quarter of this year.

The status of the economies of Europe and China will play a key role in how the U.S. markets and economy do, as the government embarks on a cost-cutting strategy and companies buy back their stock, Stovall said.

Whatever does occur as the markets react to the aforementioned circumstance, Stovall offers some tried-and-true advice in his "Seven Rules of Wall Street" including:

Let your winners ride, but cut your losers short; as goes January, so goes the year; sell in May, then go away; there is no `free lunch' on Wall Street; don't get mad, get even; don't fight the Fed (at least not for too long); and there's always a bull market someplace.

Stovall is returning to speak to the chapter for the fourth time and has always attracted a large audience, said Ronnie Braun, AAII chapter president and program chairwoman, adding that investors are looking for some direction.

"A presidential election is always unsettling, as evidenced by how the stock market went down in the days after," she said. "I asked him to come after the election so he can give his ideas on the investment outlook."

He also is expected to present some ideas on exchange-traded funds in the international sector.

Stovall will speak at 7 p.m., followed by dinner at 8 p.m. Registration starts at 6 p.m.

The cost is $45 in advance and $50 at the door. Program only is $25. To register, call 203-245-1211 or email AAIIConnecticut@aol.com.